J.P. Morgan: Quarter's investment-bank fees $1 bln

DavidBenoit

NEW YORK (MarketWatch) -- J.P. Morgan Chase & Co.
JPM, -0.45%
will book about $1 billion in investment banking fees in its third-quarter, about a third less than it had a year-earlier, said Jes Staley the head of the business.

Staley, presenting at the Barclays Capital financial conference in New York, said the third-quarter markets had been volatile and would reduce total revenues from the market by about 30% compared to the prior quarter.

Staley heads J.P. Morgan's most profitable unit and one that has bested peers in recent quarters, boosting revenues and income even amid turmoil. He said the slowdowns and volatility in the market was seen in equity offerings slowing and a general pause on mergers and acquisitions during the quarter, which finishes at the end of the month.

In the second-quarter, the investment bank had over $1.9 billion in investment banking fees and earned $2.06 billion in net income.

The bank is also expecting lower asset management revenue in the third quarter, a "modest" loss in its private equity and increased expenses in its corporate operations leading to a small loss there.

The entire corporation had $27.4 billion in revenue and $5.43 billion in profits in the second quarter.

Meanwhile, Staley continued the J.P. Morgan stance that global requirements that the world's biggest banks hold extra capital are unfair. Staley's boss, Chief Executive Jamie Dimon, recently said the rules are "anti-American" in his latest attack on rules that are likely to crimp profit margins at the bank. Staley said Dimon was "eloquently" defending the bank, as he will always when needed.

The rules include no benefits for being diversified, which unfairly punishes banks like J.P. Morgan, Staley said.

"Because we are allowing the rhetoric of big is bad to pervade the dialogue we are not giving any value to diversify the business model," Staley said. "That was one of the critical components that allowed this institution to make money every quarter during the crisis."

Staley also said the European Union has the size and economic ability to deal with its sovereign debt challenges, but faces difficult political choices.

He reiterated J.P. Morgan is comfortable with its own exposures to Europe but also said a default by Greece would spread contagion fears to other major sovereigns. He said the world would require "significant" and "bold" decisions along the lines of the actions during the financial crisis to stop the spread.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information.
All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only.
Intraday data delayed at least 15 minutes or per exchange requirements.